Lian Beng

Lian Beng: DMG issued a rpt after a change of coverage and post 3QFY14 results. Briefly, Lian Beng is deeply undervalued and has a superior core construction business over peers, due mainly to upstream self-sufficiency through supplying its own ready-mixed concrete (RMC), as well as purchasing/owning its own construction equipment. Lian Beng is growing a strong recurrent stream of earnings via its diversification into the dormitory and RMC business, which house estimates to contribute $15.1m in FY15F (24% of estimated earnings). With its latest venture into asphalt premix, Lian Beng’s recurrent earnings stream could potentially hit $20m by FY16F (32.5% y/y growth). House maintains a BUY rating and raised TP to $1.17, implying an upside of 76% from the current price.